Friday, 4 August 2006

Asia’s Security & Defence Sector IT Spending to Reach USD 5.4 bln in 2009

Security & Defence initiatives are stimulating strong spending on IT in the Asian Public Sector, according to a study conducted by information technology research firm Springboard Research. The public sector segment in the Asian market, excluding Japan, saw a remarkable increase on IT...

Security & Defence initiatives are stimulating strong spending on IT in the Asian Public Sector, according to a study conducted by information technology research firm Springboard Research. The public sector segment in the Asian market, excluding Japan, saw a remarkable increase on IT spending to USD 3.8 billion in 2005.

Springboard forecast that the spending to reach USD 5.4 billion by 2009. The research firm said that currently, most of the IT spending in the public sector comprised of Security and Defence space, representing 22 percent of total technology expenditure in the sector.

The constant threat of terrorism is one of the main reasons why military and defence require software services the most.

"With the ever-present threat of terrorism and the continuing modernization of militaries in Asia, we are seeing IT spending in the Security & Defence segment leading other segments as governments in Asia leverage technology as a key part of their security strategies," said Jonathan Silber, Senior Market Analyst for the Public Sector for Springboard Research.

Silber added that technology is now coming to the forefront in defence and internal security, and sophisticated intelligence and border control solutions are receiving far more focus in the post 9-11 world.

The study revealed that China currently has the largest IT expenditure in the Security & Defence segment in Asia, just slightly higher than Australia, with the market in 2005 being close to USD 1.3 billion.

In the coming years, Springboard forecast India to be the fastest growing with a compound annual growth rate (CAGR) of 17.6 from 2005-2009.

Australia and Singapore are in a near tie when looking at the highest IT Spending on Security & Defence on a per capita basis, while Singapore had the highest percentage of IT spending going into the Security & Defence segment at almost 30% of total Public Sector IT spending in 2005, Springboard said.

Silber pointed out that while the Security & Defence segment is by far the largest sub-vertical within the Public Sector for IT spending, the growth rate is on par with other, much smaller sub-verticals like Government Healthcare, Taxation/Finance, Social Services, and Public Works.

He said, "We believe this continued growth will present increasing opportunities for IT vendors focused on providing solutions to help meet the unique needs of this segment."

The largest individual body in the region focused on Security & Defence is the Australian Department of Defence, with an estimated IT expenditure exceeding USD 600 million in 2005, followed by the Ministry of National Defence in China with IT expenditures exceeding USD 400 million.